Guide to Selling Your Business
Profiling Your Company for Sale
In most cases the sale process can be made considerably smoother and the sale proceeds increased by careful preparation over months or even years so that your company can be presented in the most attractive light to potential purchasers.
Examples of steps that can be taken include the following:
Ensure that a strong second-tier management level is developed, so that the business can continue to run smoothly after the sale despite the departure of the current owners.
Identify and remove any “skeletons in the cupboard” or problems that might be off-putting to a purchaser – e.g. any disputes, litigation or taxation queries.
Make sure that the accounts and accounting records are in good shape; tidy-up the balance sheet and aim to maximise profitability, on a suitable upward graph, over the two or three years prior to the sale.
Review and, if necessary, strengthen all key contracts – e.g. with customers, suppliers and employees.
Consider removing from the company prior to its sale any surplus cash or non-core assets – e.g. a freehold property with development potential.
Review any important intellectual property rights and ensure that they are adequately protected.
Determine ongoing key strategic decisions in the light of the impact that they might have on a potential purchaser.
Do not overlook the cosmetic value of ensuring that the business looks its best when the premises are visited by potential purchasers.